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If real GDP is unchanged but job quality and workplace safety improve what effect on welfare is possible?

Answer and explanation

Correct answer: Welfare may rise because working conditions are not fully measured in GDP

Real GDP records the inflation-adjusted value of market production, not every aspect of people’s well-being at work. Safer workplaces, better job quality, and lower injury risk can increase workers’ satisfaction and security even if output remains unchanged. Thus welfare may rise without a rise in real GDP. Option B is correct; unchanged welfare, falling GDP, or a purely price-level effect does not logically follow from improved safety.

Related tags

GdpWelfareJob QualityWorkplace SafetyNon-Income WelfareGdp And WelfareNational Income And Related AggregatesEconomics

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